Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.
Trade-Ideas LLC identified
) as an unusual social activity candidate. In addition to specific proprietary factors, Trade-Ideas identified Cummins as such a stock due to the following factors:
- CMI has more that 20x the normal benchmarked social activity for this time of the day compared to its average of 3.61 mentions/day.
- CMI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $205.1 million.
Identifying stocks with 'Unusual Social Activity' tends to be a valuable process for traders looking to capitalize on the 'talk of the town' stocks that are basking in far more attention from the StockTwits financial community than normal. Good press? Bad press? It ultimately doesn't matter if it's good or bad if you know how to trade around the sentiment. Certain hedge funds use such data for their proprietary algorithms and it is not uncommon to see shared social sentiment play itself out in a stock's price trend.
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More details on CMI:
Cummins Inc. designs, manufactures, distributes, and services diesel and natural gas engines, and engine-related component products. It operates through four segments: Engine, Distribution, Components, and Power Generation. The stock currently has a dividend yield of 3.1%. CMI has a PE ratio of 13. Currently there are 11 analysts that rate Cummins a buy, no analysts rate it a sell, and 8 rate it a hold.
The average volume for Cummins has been 1.4 million shares per day over the past 30 days. Cummins has a market cap of $22.5 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.43 and a short float of 4.7% with 4.87 days to cover. Shares are down 14.1% year-to-date as of the close of trading on Monday.
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rates Cummins as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, reasonable valuation levels and growth in earnings per share. We feel its strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 15.4%. Since the same quarter one year prior, revenues slightly increased by 6.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- CMI's debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.32, which illustrates the ability to avoid short-term cash problems.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Machinery industry and the overall market, CUMMINS INC's return on equity exceeds that of both the industry average and the S&P 500.
- CUMMINS INC has improved earnings per share by 16.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CUMMINS INC increased its bottom line by earning $9.02 versus $7.91 in the prior year. This year, the market expects an improvement in earnings ($10.03 versus $9.02).
- You can view the full Cummins Ratings Report.